The recent meltdown has forced a new debate among rich nations — about missed economic opportunities due to an underperforming education sector. It has spurred a new vigour in official spending on education.
According to a McKinsey report, the current US GDP would have been higher by 9% to 16%, that is, $1.3 to 2.3 trillion, if the high school pass outs had been equipped with the requisite skills. Strangely for us even as a developing economy, spending is not the issue, but educational reform is, if we want to spur our economic opportunity.
Despite an impressive annual $55 billion outlay for education, India suffers from a double whammy of missing social and economic opportunities. A national average dropout rate of 50% means about $15 billion spent annually on education is unproductive, if not a complete waste. Each percentage reduction in this rate can add our GDP — some say, at least a 25%.
In spite of a mammoth spend, we continue to have large disconnects in our system that stymie student development. These force a mismatch between the student’s developmental needs and economic requirements of employment.
Educational reforms need to focus on these disconnects in our system. Some simple yet far reaching take-aways from over two decades of global research across over 1,00,000 schools, 300 colleges and 130 universities by MGRM, (Global Education Research ©MGRM 2009; recognised by ministry of science & technology) a global educational rehabilitation based research initiative, are relevant here.
This work suggests that education system should adopt a framework of continuum for all its key stake holders — namely students, teachers, administrators and alumni to address issues of educational reforms including regulation, capacity building and inclusion.
First, our education system must see a student as a continuum — from primary school to higher or technical education ie, until or even during or after employment. And it should not create any discontinuities at any stage.
The system must offer flexible entry and exit options with formal and informal choices. This implies that students be encouraged to take to vocations after school education. They need to be allowed to pursue higher education flexibly. This will ease huge peer pressure on students that cause much fear of failure and open education as a way of life.
Equally, jobs/professions must have options for affordable education and training at every step. Capacity building has to complete these gaps. Such a system will be more sensitive to student needs, inject vocational skill sets and let a student achieve what he wants to be.
This will also open newer opportunities in employment. For employers, it implies larger entry level choices. For students, it is an opportunity to learn in real life. Job experience along with higher studies produces far better productive outcomes.
At the policy level, this means that all parts of the ministry of human resource development — be it primary, middle, secondary, higher, technical or specialist education — need to work under an overarching mission to deliver education with quantifiable objectives. Today, these departments are independent silos with no shared goals.
Given the size and scale of the system today, student development at an individual level can be tracked. MGRM argues in its approach of ‘from delivery to development’ that this tracking should be from pregnancy stage where the state already runs huge budget to support women welfare. The HRD ministry would need to implement a tracking policy here.
Secondly, teacher also has to be seen as a continuum. We have done little to salvage this beleaguered institution. Once a teacher, always a teacher. This has actually stunted any teacher initiatives. Is teaching a serious career? Vertical and horizontal moves with rewards for performance can motivate teachers. An All India Teachers Service, with different specialisations may be an answer. Teachers should have a compulsory secondment to the government and private sector jobs.
Just a pay hike or title won’t do but a career path that is contemporary in outlook can galvanise this institution. But then equally, the teacher output also needs to be subjected to evaluation.
Third is the continuum of administrators with due empowerment. In my many years of interaction with governments, some officials impressed me with their insights and vision. But they are not allowed to continue. Even a three-year stint for a secretary at state or central level is rare. Bodies like UGC and AICTE are built around temporary officials on deputation.
Is the new proposed Central Commission for Higher Education going to be staffed differently in the absence of a given cadre? Where is then the question of ownership and accountability?
There is a need to create an All India Education Service which should rank at par with IAS. This service should help specialise and excel in the field of education. The HRD minister has announced a cadre for trainers which is a welcome move but this needs to be extended to education management. Governance is at the core of the issue here.
Finally, the alumni also need to be seen in this continuum, implying them a continuing part of the education system. There are examples of big funding of IITs by the alumni. Their effective alumni engagement can be a harbinger of huge resource. There is hardly any discussion on this very important resource. They can also be involved more actively in the management of their institutions.
A framework approach may ensure quantifiable objectives for the system. Do we know what outputs do we want from our system like China does? Education policy needs to usher in quantitative goals at each step.
The economic boom of the past decade was sustainable due to available bench strength of the educated workforce. But next boom may be constrained by non-availability of such strength as a demand-supply mismatch will challenge our costs. This then is an impending scenario of missed economic opportunity.
(The author is chairman SA & JVs, MGRM Technologies Inc, USA)
http://economictimes.indiatimes.com/Opinion/Comments-Analysis/Education-for-growth-opportunities/articleshow/5117950.cms
Tuesday, November 3, 2009
Sunday, November 1, 2009
Make this World a Better Place - Lubna Kably
Zenobia Aunty is in a sombre mood these days. Various niggling issues are plaguing her. She feels that there is so much each of us can do to make this world a better place. Some of us don’t merely because of lack of time, or information on how to help. Initiatives such as Teach-India, Joy of Giving Week, etc., help but much more needs to be done.
Fortunately, business entities are increasingly expected to devote some of their resources towards social welfare (corporate social responsibility, as it is called). Today stakeholders look beyond mere numbers. The World Bank conducted a survey, albeit some years ago, of 107 MNCs.
Eighty per cent or more MNCs reported analysing the CSR performance of potential partner firms in developing countries; 50% or more chose certain partners over others because of CSR concerns; and 88% reported that CSR issues are more influential today.
From a sheer business standpoint it makes sense to report on CSR activities. It makes greater sense for intermediaries involved in policy initiatives to track such activities and for the government to support disclosure practices either directly or indirectly.
The World Bank in its report, ‘Opportunities and Obstacles for CSR responsibility reporting in developing countries’, (World Bank Report, March 2004) points out intermediary groups are critical in analysing and deploying information and in creating demands for improved reporting. Stakeholder groups with built-in incentives for using, analysing and monitoring the quality of the information are central to its long-term sustainability.
In India, while a lot of companies and groups are actively engaged in CSR activities, CSR reporting is not obligatory under the Companies Act, 1956 nor prescribed in the proposed Companies Act. Way back in 1978, it was the Sachar Committee that had first recommended that a social report be made mandatory in annual reports to shareholders. Today we see a hotchpotch of reporting styles, if at all any.
Zenobia Aunty also learns that an NGO or two, do rate companies based on their CSR activities. But government backing and that of its stakeholders would create a better reporting environment and help in rewarding the socially conscious companies.
The World Bank states that there is no single reporting system or model of corporate transparency that fits all social or environmental problems. However, it suggests that matrices for reporting should in general be agreed upon by key stakeholders (representing what matters to them); factual, accurate and verifiable; reported at regular intervals in relatively simple language or data; comparable across locations, firms and products; flexible and dynamic — so that the metrics can change over time; usable by key stakeholders and easily accessible.
Zenobia Aunty adds: "Professional institutions such as the ICAI or trade associations such as Ficci, CII, Assocham, etc, can play an important role in bringing uniformity and in encouraging companies to take firm steps towards CSR accounting/disclosure." Further, awards for those companies which give back to the society would also provide an extra impetus.
It may be easy to argue that a particular company has sponsored a village merely because its labour force is based in that village. Whatever be it, by adopting the village it has helped Indian society.
While some companies do report their CSR activities, others do not. There is no uniformity. In fact, lack of standardized reporting also means that those who do not contribute to society do not suffer any adverse impact at all, nor are those who give back to the society benefited in any manner.
Steps must be taken to create a standardized CSR Index across India Inc. It could comprise essentially of 4-5 elements such as contributions towards the environment, education, healthcare and lastly donations for disaster recovery plans. Weightages for each element could vary but disclosure of the parameters and weightages would be a must in the CSR Index.
It may be too much to ask the government to provide additional tax concessions (other than those available — say for donation to a PM’s National Relief Fund), to companies that are actively engaged in CSR activities. However, in the long run, market forces would reward such companies.
Other policies also need to change and it is here that the government can help. Zenobia Aunty wanted XYZ company to divert her dividend income to a reputed NGO’s bank account. Alas XYZ company as per the Companies Act is required to send the dividend cheque to Zenobia Aunty or to transfer the dividend directly to her bank account.
Companies must have the option of crediting the bank account of an NGO with the dividend amount, at the direction of a shareholder. In fact, they can then even sponsor a particular NGO and provide for a form in their Annual Report or newsletter that would facilitate such a transfer. Small things can go a long way.
http://economictimes.indiatimes.com/opinion/editorial/Make-this-world-a-better-place-/articleshow/5178702.cms
Fortunately, business entities are increasingly expected to devote some of their resources towards social welfare (corporate social responsibility, as it is called). Today stakeholders look beyond mere numbers. The World Bank conducted a survey, albeit some years ago, of 107 MNCs.
Eighty per cent or more MNCs reported analysing the CSR performance of potential partner firms in developing countries; 50% or more chose certain partners over others because of CSR concerns; and 88% reported that CSR issues are more influential today.
From a sheer business standpoint it makes sense to report on CSR activities. It makes greater sense for intermediaries involved in policy initiatives to track such activities and for the government to support disclosure practices either directly or indirectly.
The World Bank in its report, ‘Opportunities and Obstacles for CSR responsibility reporting in developing countries’, (World Bank Report, March 2004) points out intermediary groups are critical in analysing and deploying information and in creating demands for improved reporting. Stakeholder groups with built-in incentives for using, analysing and monitoring the quality of the information are central to its long-term sustainability.
In India, while a lot of companies and groups are actively engaged in CSR activities, CSR reporting is not obligatory under the Companies Act, 1956 nor prescribed in the proposed Companies Act. Way back in 1978, it was the Sachar Committee that had first recommended that a social report be made mandatory in annual reports to shareholders. Today we see a hotchpotch of reporting styles, if at all any.
Zenobia Aunty also learns that an NGO or two, do rate companies based on their CSR activities. But government backing and that of its stakeholders would create a better reporting environment and help in rewarding the socially conscious companies.
The World Bank states that there is no single reporting system or model of corporate transparency that fits all social or environmental problems. However, it suggests that matrices for reporting should in general be agreed upon by key stakeholders (representing what matters to them); factual, accurate and verifiable; reported at regular intervals in relatively simple language or data; comparable across locations, firms and products; flexible and dynamic — so that the metrics can change over time; usable by key stakeholders and easily accessible.
Zenobia Aunty adds: "Professional institutions such as the ICAI or trade associations such as Ficci, CII, Assocham, etc, can play an important role in bringing uniformity and in encouraging companies to take firm steps towards CSR accounting/disclosure." Further, awards for those companies which give back to the society would also provide an extra impetus.
It may be easy to argue that a particular company has sponsored a village merely because its labour force is based in that village. Whatever be it, by adopting the village it has helped Indian society.
While some companies do report their CSR activities, others do not. There is no uniformity. In fact, lack of standardized reporting also means that those who do not contribute to society do not suffer any adverse impact at all, nor are those who give back to the society benefited in any manner.
Steps must be taken to create a standardized CSR Index across India Inc. It could comprise essentially of 4-5 elements such as contributions towards the environment, education, healthcare and lastly donations for disaster recovery plans. Weightages for each element could vary but disclosure of the parameters and weightages would be a must in the CSR Index.
It may be too much to ask the government to provide additional tax concessions (other than those available — say for donation to a PM’s National Relief Fund), to companies that are actively engaged in CSR activities. However, in the long run, market forces would reward such companies.
Other policies also need to change and it is here that the government can help. Zenobia Aunty wanted XYZ company to divert her dividend income to a reputed NGO’s bank account. Alas XYZ company as per the Companies Act is required to send the dividend cheque to Zenobia Aunty or to transfer the dividend directly to her bank account.
Companies must have the option of crediting the bank account of an NGO with the dividend amount, at the direction of a shareholder. In fact, they can then even sponsor a particular NGO and provide for a form in their Annual Report or newsletter that would facilitate such a transfer. Small things can go a long way.
http://economictimes.indiatimes.com/opinion/editorial/Make-this-world-a-better-place-/articleshow/5178702.cms
King coal's Climate Policy - Jeffery D Sachs
With developing countries displaying their readiness to reach a global deal, could the US Senate really prove to be the world’s last great holdout?
The United Nations climate Change Treaty, signed in 1992, committed the world to "avoiding dangerous anthropogenic interference in the climate system." Yet, since that time, greenhouse-gas emissions have continued to soar.
The United States has proved to be the biggest laggard in the world, refusing to sign the 1997 Kyoto Protocol or to adopt any effective domestic emission controls. As we head into the global summit in Copenhagen in December to negotiate a successor to the Kyoto Protocol, the US is once again the focus of concern. Even now, American politics remains strongly divided over climate change — though President Barack Obama has new opportunities to break the logjam.
A year after the 1992 treaty, President Bill Clinton tried to pass an energy tax that would have helped the US to begin reducing its dependence on fossil fuels. The proposal not only failed, but also triggered a political backlash. When the Kyoto Protocol was adopted in 1997, Clinton did not even send it to the US Senate for ratification, knowing that it would be rejected. President George W Bush repudiated the Kyoto Protocol in 2001 and did essentially nothing on climate change during his presidency.
There are several reasons for US inaction — including ideology and scientific ignorance — but a lot comes down to one word: coal. No fewer than 25 states produce coal, which not only generates income, jobs, and tax revenue, but also provides a disproportionately large share of their energy.
Per capita carbon emissions in US coal states tend to be much higher than the national average. Since addressing climate change is first and foremost directed at reduced emissions from coal — the most carbon-intensive of all fuels — America’s coal states are especially fearful about the economic implications of any controls (though the oil and automobile industries are not far behind).
The US political system poses special problems as well. To ratify a treaty requires the support of 67 of the Senate’s 100 members, a nearly impossible hurdle. The Republican Party, with its 40 Senate seats, is simply filled with too many ideologues — and, indeed, too many senators intent on derailing any Obama initiative — to offer enough votes to reach the 67-vote threshold. Moreover, the Democratic Party includes senators from coal and oil states who are unlikely to support decisive action.
The idea this time around is to avoid the need for 67 votes, at least at the start, by focusing on domestic legislation rather than a treaty. Under the US Constitution, domestic legislation (as opposed to international treaties) requires a simple majority in both the House of Representatives and the Senate to be sent to the President for signature.
Getting 50 votes for a climate-change Bill (with a tie vote broken by the vice president) is almost certain. But opponents of legislation can threaten to filibuster (speak for an indefinite period and thereby paralyse Senate business), which can be ended only if 60 senators support bringing the legislation to a vote. Otherwise, proposed legislation can be killed, even if it has the support of a simple majority. That will certainly be true of domestic climate-change legislation. Securing 60 votes is a steep hill to climb.
Political analysts know that the votes will depend on individual senators’ ideologies, states’ voting patterns, and states’ dependence on coal, relative to other energy sources. Based on these factors, one analysis counts 50 likely Democratic "Yes" votes and 34 Republican "No" votes, leaving 16 votes still in play. Ten of the swing votes are Democrats, mainly from coal states; the other six are Republicans who conceivably could vote with the President and the Democratic majority.
Until recently, many believed that China and India would be the real holdouts in the global climate-change negotiations. Yet China has announced a set of major initiatives — in solar, wind, nuclear, and carbon-capture technologies — to reduce its economy’s greenhouse-gas intensity.
India, long feared to be a spoiler, has said that it is ready to adopt a significant national action plan to move towards a trajectory of sustainable energy. These actions put the US under growing pressure to act. With developing countries displaying their readiness to reach a global deal, could the US Senate really prove to be the world’s last great holdout?
Obama has tools at his command to bring the US into the global mainstream on climate change. First, he is negotiating side deals with holdout senators to cushion the economic impact on coal states and to increase US investments in the research and development, and eventually adoption, of clean-coal technologies.
Second, he can command the Environmental Protection Agency to impose administrative controls on coal plants and automobile producers even if the Congress does not pass new legislation. The administrative route might turn out to be even more important than the legislative route.
The politics of the US Senate should not obscure the larger point: America has acted irresponsibly since signing the climate treaty in 1992. It is the world’s largest and most powerful country, and the one most responsible for the climate change to this point. It has behaved without any sense of duty — to its own citizens, to the world, and to future generations.
Even coal-state senators should be ashamed. Sure, their states need some extra help, but narrow interests should not be permitted to endanger our planet’s future. It is time for the US to rejoin the global family.
(The author is professor of economics and director of the Earth Institute at Columbia University)
http://economictimes.indiatimes.com/articleshow/5182353.cms
The United Nations climate Change Treaty, signed in 1992, committed the world to "avoiding dangerous anthropogenic interference in the climate system." Yet, since that time, greenhouse-gas emissions have continued to soar.
The United States has proved to be the biggest laggard in the world, refusing to sign the 1997 Kyoto Protocol or to adopt any effective domestic emission controls. As we head into the global summit in Copenhagen in December to negotiate a successor to the Kyoto Protocol, the US is once again the focus of concern. Even now, American politics remains strongly divided over climate change — though President Barack Obama has new opportunities to break the logjam.
A year after the 1992 treaty, President Bill Clinton tried to pass an energy tax that would have helped the US to begin reducing its dependence on fossil fuels. The proposal not only failed, but also triggered a political backlash. When the Kyoto Protocol was adopted in 1997, Clinton did not even send it to the US Senate for ratification, knowing that it would be rejected. President George W Bush repudiated the Kyoto Protocol in 2001 and did essentially nothing on climate change during his presidency.
There are several reasons for US inaction — including ideology and scientific ignorance — but a lot comes down to one word: coal. No fewer than 25 states produce coal, which not only generates income, jobs, and tax revenue, but also provides a disproportionately large share of their energy.
Per capita carbon emissions in US coal states tend to be much higher than the national average. Since addressing climate change is first and foremost directed at reduced emissions from coal — the most carbon-intensive of all fuels — America’s coal states are especially fearful about the economic implications of any controls (though the oil and automobile industries are not far behind).
The US political system poses special problems as well. To ratify a treaty requires the support of 67 of the Senate’s 100 members, a nearly impossible hurdle. The Republican Party, with its 40 Senate seats, is simply filled with too many ideologues — and, indeed, too many senators intent on derailing any Obama initiative — to offer enough votes to reach the 67-vote threshold. Moreover, the Democratic Party includes senators from coal and oil states who are unlikely to support decisive action.
The idea this time around is to avoid the need for 67 votes, at least at the start, by focusing on domestic legislation rather than a treaty. Under the US Constitution, domestic legislation (as opposed to international treaties) requires a simple majority in both the House of Representatives and the Senate to be sent to the President for signature.
Getting 50 votes for a climate-change Bill (with a tie vote broken by the vice president) is almost certain. But opponents of legislation can threaten to filibuster (speak for an indefinite period and thereby paralyse Senate business), which can be ended only if 60 senators support bringing the legislation to a vote. Otherwise, proposed legislation can be killed, even if it has the support of a simple majority. That will certainly be true of domestic climate-change legislation. Securing 60 votes is a steep hill to climb.
Political analysts know that the votes will depend on individual senators’ ideologies, states’ voting patterns, and states’ dependence on coal, relative to other energy sources. Based on these factors, one analysis counts 50 likely Democratic "Yes" votes and 34 Republican "No" votes, leaving 16 votes still in play. Ten of the swing votes are Democrats, mainly from coal states; the other six are Republicans who conceivably could vote with the President and the Democratic majority.
Until recently, many believed that China and India would be the real holdouts in the global climate-change negotiations. Yet China has announced a set of major initiatives — in solar, wind, nuclear, and carbon-capture technologies — to reduce its economy’s greenhouse-gas intensity.
India, long feared to be a spoiler, has said that it is ready to adopt a significant national action plan to move towards a trajectory of sustainable energy. These actions put the US under growing pressure to act. With developing countries displaying their readiness to reach a global deal, could the US Senate really prove to be the world’s last great holdout?
Obama has tools at his command to bring the US into the global mainstream on climate change. First, he is negotiating side deals with holdout senators to cushion the economic impact on coal states and to increase US investments in the research and development, and eventually adoption, of clean-coal technologies.
Second, he can command the Environmental Protection Agency to impose administrative controls on coal plants and automobile producers even if the Congress does not pass new legislation. The administrative route might turn out to be even more important than the legislative route.
The politics of the US Senate should not obscure the larger point: America has acted irresponsibly since signing the climate treaty in 1992. It is the world’s largest and most powerful country, and the one most responsible for the climate change to this point. It has behaved without any sense of duty — to its own citizens, to the world, and to future generations.
Even coal-state senators should be ashamed. Sure, their states need some extra help, but narrow interests should not be permitted to endanger our planet’s future. It is time for the US to rejoin the global family.
(The author is professor of economics and director of the Earth Institute at Columbia University)
http://economictimes.indiatimes.com/articleshow/5182353.cms
Saturday, October 31, 2009
Who's afraid of Foreign Universities? - Pankaj Jalote
Within the country there has been a debate for sometime on allowing foreign universities to operate in India. The main argument against allowing foreign universities is that they may come here for making money by exploiting the huge demand for higher education. Let us examine this aspect.
It should be clear that a foreign university operating in India will have to keep the fees substantially lower than that in the foreign country concerned. Otherwise the student will simply go to the parent varsity, as it also opens opportunities of working/settling overseas and gives overseas exposure and experience, which is much sought after by Indians.
Furthermore, keeping in mind the paying capacity of the middle class, the tuition fees have to be accessible. Currently the highest fee in private universities is of the order of Rs 2 lakh or about $4,000 per year. Overall, it is very unlikely that in the short-to-medium term, a foreign university can charge substantially more than this in India for undergraduate education.
If we assume a fee of about $5,000 per year (approximately half the fees in many mid-level universities in the US), the university will have a revenue of $5 million with 1,000 UG students, and $50 million when it reaches a UG student population of 10,000, i.e., an intake approximately equal to that of the five main IITs.
Though this amount may be significant for the smaller universities, for a well known university, this is a very small sum — such universities often have a budget of more than $1 billion (MIT’s budget is over $2 billion, Georgia Tech’s is around $1.2 billion — both medium-sized universities). Clearly, this type of money is not going to be a significant attraction for the big-name universities to come to India. And remember this is the total fee revenue, not profit, and that it is generated only when the operations become very large.
So, if we restrict ourselves to the top universities of the world, we can safely resolve the main concern of profiteering. And if we require that they must have a research-led operation in India, then not only does the risk further reduces as such institutes require much more investment, it also helps increase the production of PhDs — which will help academics and R&D in the country even further.
If profit is not going to be an incentive for a top university, then why should such a university come to India? How can India attract them to come? Perhaps the main attraction will be to be present in emerging India, which can be a major player in the global knowledge society. If a university aspires to be a global brand in future, having a presence in India will be an asset.
Second reason is similar to why R&D organisations are opening centres in India — to tap the benefits of the R&D talent, the young population, and the cost benefits. The Indian operations can also be leveraged for executing R&D projects in the parent by outsourcing part of the project to their Indian operations. As research is an important focus for top universities in the world, this provides a strong reason for operating in India.
Third, the India operations, due to their lower costs, can become the centre for providing education opportunities to students from across the world that cannot be serviced by the parent due to high cost.
Fourth, by having multi-year student exchange between the parent and Indian campus, the cost of education in the parent can be reduced — a goal that many universities want to pursue.
These reasons are not as tangible as profits, but something that major universities can appreciate. And it will be for us to convince these universities that it is these types of “soft” reasons for which they should come to India.
It is also worth noting that for creating a high quality university in India, a top foreign university has a number of advantages over its Indian counterpart for attracting and retaining faculty. First, it can use its stature and presence in the west to actively recruit there, where there is a large pool of Indian talent available.
With the branding of the original university, and a commitment to create something similar, the attraction can be tremendous. And by providing opportunities of spending sabbaticals in parent, it can create a unique proposition to attract faculty in India that others cannot match. It can also use its existing faculty to set up systems as well as start the programmes in India, alleviating the start-up difficulties.
To ensure that a foreign university operating in India serves our objectives, we have to ensure two things — the university should be one of the top universities of the world, and it must have a strong research programme. To put this in practice, one possibility is to invite the top universities to open campuses here.
The only constraint that should be imposed on them is that some percentage of their students should be PhD students (at least one-fourth). If this constraint is agreed to, then the government should go out of its way to facilitate their operations by providing cheap land, and giving complete freedom to operate.
(The author is director, IIT Delhi and professor IIT Delhi. Views are personal.)
http://economictimes.indiatimes.com/Opinion/Whos-afraid-of-foreign-universities/articleshow/5174767.cms
It should be clear that a foreign university operating in India will have to keep the fees substantially lower than that in the foreign country concerned. Otherwise the student will simply go to the parent varsity, as it also opens opportunities of working/settling overseas and gives overseas exposure and experience, which is much sought after by Indians.
Furthermore, keeping in mind the paying capacity of the middle class, the tuition fees have to be accessible. Currently the highest fee in private universities is of the order of Rs 2 lakh or about $4,000 per year. Overall, it is very unlikely that in the short-to-medium term, a foreign university can charge substantially more than this in India for undergraduate education.
If we assume a fee of about $5,000 per year (approximately half the fees in many mid-level universities in the US), the university will have a revenue of $5 million with 1,000 UG students, and $50 million when it reaches a UG student population of 10,000, i.e., an intake approximately equal to that of the five main IITs.
Though this amount may be significant for the smaller universities, for a well known university, this is a very small sum — such universities often have a budget of more than $1 billion (MIT’s budget is over $2 billion, Georgia Tech’s is around $1.2 billion — both medium-sized universities). Clearly, this type of money is not going to be a significant attraction for the big-name universities to come to India. And remember this is the total fee revenue, not profit, and that it is generated only when the operations become very large.
So, if we restrict ourselves to the top universities of the world, we can safely resolve the main concern of profiteering. And if we require that they must have a research-led operation in India, then not only does the risk further reduces as such institutes require much more investment, it also helps increase the production of PhDs — which will help academics and R&D in the country even further.
If profit is not going to be an incentive for a top university, then why should such a university come to India? How can India attract them to come? Perhaps the main attraction will be to be present in emerging India, which can be a major player in the global knowledge society. If a university aspires to be a global brand in future, having a presence in India will be an asset.
Second reason is similar to why R&D organisations are opening centres in India — to tap the benefits of the R&D talent, the young population, and the cost benefits. The Indian operations can also be leveraged for executing R&D projects in the parent by outsourcing part of the project to their Indian operations. As research is an important focus for top universities in the world, this provides a strong reason for operating in India.
Third, the India operations, due to their lower costs, can become the centre for providing education opportunities to students from across the world that cannot be serviced by the parent due to high cost.
Fourth, by having multi-year student exchange between the parent and Indian campus, the cost of education in the parent can be reduced — a goal that many universities want to pursue.
These reasons are not as tangible as profits, but something that major universities can appreciate. And it will be for us to convince these universities that it is these types of “soft” reasons for which they should come to India.
It is also worth noting that for creating a high quality university in India, a top foreign university has a number of advantages over its Indian counterpart for attracting and retaining faculty. First, it can use its stature and presence in the west to actively recruit there, where there is a large pool of Indian talent available.
With the branding of the original university, and a commitment to create something similar, the attraction can be tremendous. And by providing opportunities of spending sabbaticals in parent, it can create a unique proposition to attract faculty in India that others cannot match. It can also use its existing faculty to set up systems as well as start the programmes in India, alleviating the start-up difficulties.
To ensure that a foreign university operating in India serves our objectives, we have to ensure two things — the university should be one of the top universities of the world, and it must have a strong research programme. To put this in practice, one possibility is to invite the top universities to open campuses here.
The only constraint that should be imposed on them is that some percentage of their students should be PhD students (at least one-fourth). If this constraint is agreed to, then the government should go out of its way to facilitate their operations by providing cheap land, and giving complete freedom to operate.
(The author is director, IIT Delhi and professor IIT Delhi. Views are personal.)
http://economictimes.indiatimes.com/Opinion/Whos-afraid-of-foreign-universities/articleshow/5174767.cms
City growth: When Big is not Beautiful - Kala Seetharam Sridhar
India has 35 cities with million-plus population, with Mumbai leading the pack with a population of about 17 million. The question arises — can individual cities grow forever and whether there is an optimum city size? This is an important question as development plans of cities frequently follow the direction of development rather than guiding them.
Is the current size of cities justifiable in terms of greater efficiencies in the production of goods, services and amenities offered to their residents? General equilibrium models of city growth refer to the drawbacks of increasing city size — high cost of living, crime, pollution and congestion costs.
For example, in Bangalore, the one-way commute time to work increased from about 24 minutes in 1991 to 40 minutes in 2001. Thus, city population can grow, but the city may or may not grow economically. This happens as a city will experience congestion and decline in its economic output if its population grows beyond a certain limit. One manifestation of excessive city growth is the suburbanisation and urban sprawl we see in India’s cities.
With decentralisation of population and jobs from the dense core of cities to less densely developed suburbs, monocentric cities have evolved into polycentric cities. While such decentralisation is caused by rising incomes, rising land costs at the city centre and problems with the central city (high taxes, poor public services, high crime rates), recent research also attributes urban sprawl to strong land use controls in India’s cities.
A research shows that the maximum floor area ratio (FAR) — which refers to the ratio of built area to plot area — permissible in India’s cities is not even five whereas cities across the world have FARs ranging from well above 10. A higher FAR implies vertical city growth. Vertical city growth is more efficient if the infrastructure necessary to support it is in place — it would be poor public economics not to use fully-serviced plots of land with water and sewer networks, roads in the centre of the city. Low FARs lead to inefficient cities.
Efficiency of cities is partly determined by the mobility and access needs of the population as it has a direct relationship with the city’s economic activity such as commute to school, jobs and shopping trips. While Indian cities’ decentralisation has been caused by rising incomes and the use of the automobile, one direct outcome of the urban sprawl has been that Indian cities have become automobile-oriented with little space for pedestrians and cyclists. For instance, Indians bought 1.5 million cars in 2007, more than double than that in 2003.
Delhi, Mumbai, Kolkata and Bangalore have 5% of India’s population but 14% of its registered vehicles. Pedestrians and cyclists account for a substantial part of urban population. In Delhi, pedestrians and cyclists account for around 55% of the population. Pedestrian accessibility in Indian cities is poor – there are no sidewalks, and where they exist, they are taken over by parked vehicles, uncollected garbage, or encroachment by local businesses.
Rightly, a recent research points out that policymaking related to urban transport has focused predominantly on road infrastructure development such as the construction of flyovers. However, given the fact that pedestrians and cyclists are the most vulnerable road users, budgets for the provision of infrastructure for them have been minuscule. This is not consistent with their number. A 3.5 metre lane has a carrying capacity of 1,800 cars per hour while it can carry 5,400 bicycles per hour. Providing segregated infrastructure for pedestrians and cyclists would not cost much, but would greatly improve the efficiency of cities by facilitating the mobility of masses.
The above does not imply that we do not need highways or expressways of international standards. We need them for long distances and for facilitating movement of public transport that is affordable, convenient and safe to use. Highways are efficient if they are used for high occupancy vehicles such as public transport as compared to cars.
What the above implies is that decentralisation and sprawl have occurred in India’s cities, with economic growth, rising incomes, rising land costs, and land use regulation playing a role. With rising incomes, the sprawl has also brought about increased usage of cars with poor access for pedestrians and cyclists. We have to consciously decide what kind of cities we want. Only innovative city planning and better infrastructure to support them, better space and planning for pedestrians, cyclists and public transport will ensure that we have efficient and equitable cities whose costs do not outweigh their benefits.
(The author is senior research fellow, Public Affairs Centre. Views are personal)
http://economictimes.indiatimes.com/Opinion/City-growth-When-big-is-not-beautiful/articleshow/5174679.cms
Is the current size of cities justifiable in terms of greater efficiencies in the production of goods, services and amenities offered to their residents? General equilibrium models of city growth refer to the drawbacks of increasing city size — high cost of living, crime, pollution and congestion costs.
For example, in Bangalore, the one-way commute time to work increased from about 24 minutes in 1991 to 40 minutes in 2001. Thus, city population can grow, but the city may or may not grow economically. This happens as a city will experience congestion and decline in its economic output if its population grows beyond a certain limit. One manifestation of excessive city growth is the suburbanisation and urban sprawl we see in India’s cities.
With decentralisation of population and jobs from the dense core of cities to less densely developed suburbs, monocentric cities have evolved into polycentric cities. While such decentralisation is caused by rising incomes, rising land costs at the city centre and problems with the central city (high taxes, poor public services, high crime rates), recent research also attributes urban sprawl to strong land use controls in India’s cities.
A research shows that the maximum floor area ratio (FAR) — which refers to the ratio of built area to plot area — permissible in India’s cities is not even five whereas cities across the world have FARs ranging from well above 10. A higher FAR implies vertical city growth. Vertical city growth is more efficient if the infrastructure necessary to support it is in place — it would be poor public economics not to use fully-serviced plots of land with water and sewer networks, roads in the centre of the city. Low FARs lead to inefficient cities.
Efficiency of cities is partly determined by the mobility and access needs of the population as it has a direct relationship with the city’s economic activity such as commute to school, jobs and shopping trips. While Indian cities’ decentralisation has been caused by rising incomes and the use of the automobile, one direct outcome of the urban sprawl has been that Indian cities have become automobile-oriented with little space for pedestrians and cyclists. For instance, Indians bought 1.5 million cars in 2007, more than double than that in 2003.
Delhi, Mumbai, Kolkata and Bangalore have 5% of India’s population but 14% of its registered vehicles. Pedestrians and cyclists account for a substantial part of urban population. In Delhi, pedestrians and cyclists account for around 55% of the population. Pedestrian accessibility in Indian cities is poor – there are no sidewalks, and where they exist, they are taken over by parked vehicles, uncollected garbage, or encroachment by local businesses.
Rightly, a recent research points out that policymaking related to urban transport has focused predominantly on road infrastructure development such as the construction of flyovers. However, given the fact that pedestrians and cyclists are the most vulnerable road users, budgets for the provision of infrastructure for them have been minuscule. This is not consistent with their number. A 3.5 metre lane has a carrying capacity of 1,800 cars per hour while it can carry 5,400 bicycles per hour. Providing segregated infrastructure for pedestrians and cyclists would not cost much, but would greatly improve the efficiency of cities by facilitating the mobility of masses.
The above does not imply that we do not need highways or expressways of international standards. We need them for long distances and for facilitating movement of public transport that is affordable, convenient and safe to use. Highways are efficient if they are used for high occupancy vehicles such as public transport as compared to cars.
What the above implies is that decentralisation and sprawl have occurred in India’s cities, with economic growth, rising incomes, rising land costs, and land use regulation playing a role. With rising incomes, the sprawl has also brought about increased usage of cars with poor access for pedestrians and cyclists. We have to consciously decide what kind of cities we want. Only innovative city planning and better infrastructure to support them, better space and planning for pedestrians, cyclists and public transport will ensure that we have efficient and equitable cities whose costs do not outweigh their benefits.
(The author is senior research fellow, Public Affairs Centre. Views are personal)
http://economictimes.indiatimes.com/Opinion/City-growth-When-big-is-not-beautiful/articleshow/5174679.cms
Friday, October 30, 2009
Caveats of Falling Mobile Charges - V Sridhar & G Venkatesh
The mobile usage charges typically depend on the volume of call minutes and the termination location. It reflects the marginal cost of carrying the call from the source to the destination. In general, calls terminated within caller’s networks (referred to as on-net calls) are often charged less than those terminated in other operator’s networks (i.e., off-net calls).
One reason for this is the termination charge (20 paise/min currently) to be paid to the receiver’s network for off-net calls. In a larger network with more subscribers, a typical user is more likely to find the potential recipient also to be in the same network (also referred to as the network effect). Hence it is expected that users would prefer to subscribe to a larger operator’s network to gain advantage of on-net call plans.
To counter this, new entrants with a smaller subscriber base need to offer very competitive tariff plans to attract subscribers, which is precisely what is happening today in the Indian mobile market. However, the average usage charges, especially for off-net calls cannot come down significantly due to the positive termination charges. Hence the new entrants suffer from both lower network effect and positive termination charges. However, there are strong reasons for new entrants to charge lower usage charges since the offered traffic on their network is much lower than the capacity of the networks. Since network capacity is perishable, the new entrant is better off charging a very low price and invite users to join the network and create traffic.
One of the successful methods the new entrants have used to attract new/ churned subscribers is the per-second billing as opposed to fixed time duration pulses. When more and more subscribers hook on to the network of the entrants, the network traffic also grows and the difference between capacity and offered traffic decreases. It is at this stage that the network faces congestion and the operator is forced to increase the usage charges to maintain the quality of service. However by now the new operator would have hopefully built a large enough subscriber base to sustain itself. Hence the critical mass of subscribers that the new entrant needs for sustainability is when the network effect starts dominating the price effect. The entrants who could not accumulate the critical mass are up for grabs by the larger incumbent operators.
In general, the subscriber is involved in a two-stage selection process: first on the subscription plan and second on the usage volume plan. Since these two stages are temporally separated, users can adjust their calling behaviour after subscribing to the plan. Per-second billing provides the subscriber greater flexibility in controlling the volume of usage. After the user subscribes to the plan, there are carrier-level shocks such as network signal quality and user service experience, based on which the customer selects the volume of calls to be made in accordance with her expected utilities.
Thus it is important for the operator to provide complete information about the tariff plan to the subscriber at the time of subscription so that the net welfare including that of the operator is maximised. Without this clarity, subscribers are likely to bicker about operators deliberately dropping calls or increasing the call rates after a specific duration. The regulator would do well to get the operators to publish in detail all the conditions of tariff plans for the benefit of the consumers.
Will the incumbents follow the price war and embrace the per second tariff model? With mobile number portability due to commence in December and the fact that more than 80% of the subscribers are pre-paid without much loyal attachment to the operators, the smaller incumbents have no option but to follow to reduce the churn. The per-second billing is expected to reduce the average call holding time, thus decreasing the average revenue per user, with subsequent decline in profit margins.
When will the price war end? It is expected to continue until at least a couple of new entrants accumulate subscribers to reach the critical mass. With the current mobile density touching 40 per 100, there is still some room for a few new entrants to reach the critical mass in certain service areas. This will increase the number of active operators in the service area to 9-10. What will happen to the remaining 4-5 operators who have been given licence in 2007 is anybody’s guess.
(Dr Sridhar is Research Fellow & Dr Venkatesh, CTO/CSO, Sasken Communication Technologies. Views are personal.)
QWERTY - History of the Modern Keyboard
Do you know what QWERTY is? Unsure - then just glance down at your computer key-board. The first six letters at the top left of your keyboard spell it out – QWERTY. Well, did you know that this arrangement of letters, along with the other 20 on the traditional keyboard were arranged that way to make the job of typing more difficult? Let's find out why?
The first commercially successful typewriter was developed by Christopher Latham Sholes in 1873. Originally, the keys were arranged alphabetically. However, a problem soon arose. People became so adept at using the keyboard that the keys would stick or jam when struck in quick succession. In order to overcome this problem Sholes decided to make the job of typing as slow as he possibly could. His solution? He placed the most frequently used keys as far apart from each other as he could. His keyboard became known as the QWERTY keyboard.
So, that is the reason why your keyboard is formatted the way it is. Ironic, really – considering that every other aspect of your computer is streamlined for maximum efficiency and yet you have to labor over a 127 year old system designed specifically for inefficiency. And inefficient it certainly is. For one thing, QWERTY was not designed for touch typing, which came much later. For keys that are not in the middle or home row it is necessary to reach across diagonally. This is difficult and leads to a high error rate.
Yet, there is a better system. Unfortunately, too few people are aware of it. It is called the DVORAK keyboard system. It was designed by August Dvorak in the 1930’s. Dvorak’s keyboard put nine of the most used letters in the middle row of the keyboard. This allows the typist to write over 3,000 words without the fingers reaching. In comparison, only about 50 words can be typed on a keyboard without reaching on QWERTY’s middle or home row. Another advantage of the DVORAK keyboard is that the workload is much reduced. This is achieved by redistributing the workload amongst the fingers. As a result the fingers of a typist on a DVORAK keyboard moves about one mile per day whereas the same typist on a conventional QWERTY keyboard will move his fingers between 12 and 20 miles per day.
So, does the DVORAK system really improve performance. In order to prove that it does August Dvorak retrained 14 Navy typists during World War Two. The result? After just one month their work productivity rate improved by an amazing 74 percent. Accuracy improved by 68 percent. So, you would think that people would be jumping over each other to switch over from QWERTY to DVORAK. Surprisingly, this has not proved to be the case. DVORAK keyboards are readily available on most computers and typewriters, yet – by and large – they remain unutilised..
An even better keyboard than the DVORAK version is the MALT keyboard devised by Lillian Malt. The Malt keyboard does away with staggered rows, gives greater use of the thumb and makes it easier to reach the backspace and other normally out of the way keys. Unlike the DVORAK keyboard, however, the MALT version will require special hardware I order to be installed onto your computer. Modern designs are also available on both the DVORAK and the MALT keyboards that are specially contoured to alleviate the physical problems associated with the traditional typewriter style keyboard. DVORAK have also put out one handed keyboards which give a free hand for other tasks while typing.
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